The Blended Lifestyle

Friday, 20 July 2012

I went to see my friend Greg Muttit speak in San Francisco yesterday. I took the BART (our tube) under the water and then cycled up the sunny San Francisco hills to get there.

Greg has published a book called 'Fuel on the Fire - Oil and Politics in Occupied Iraq.' After the protests against the war in 2003 he just started following what was happening to the oil. It became an epic journey.

Walking out of the talk and into the sunlight, I wanted to rage and cry to see, and cycle into, an 8 lane road. To have learnt of the straight forward barbarity that had been involved in securing access to oil, for two countries, my two countries if you like - the US and the UK - where transport cultures are based on the personal car, which everyone depends on to get to work, and where we rely on petrol trucks to bring us food. How else could we imagine these systems?

Greg explained that the US and UK didn't want to simply buy the oil from Iraq because demand was rising fast and Iraqi supply wasn't keeping up. The allies wanted more investment in the oil infrastructure and saw private ownership by US and UK companies as the way to secure that. It also seemed more secure in the long term, as demand for oil is rising fast around the world, particularly in countries like Russia, China, Brazil, India - so they wanted a way to keep the oil flowing towards us.

Iraq has 10% of the world's oil. Iraq and three of its neighbours have, between them, 60% of the world's oil. And the industries of all four were nationally owned, meaning the profits were (potentially at least) available for schools, healthcare, housing and so on.

It was not in Iraqi interest to increase oil production the way the US wanted. That would drive down the price, so they'd sell more for the same amount of money, and have none left for future generations.

That didn't satisfy the US.

So, with allies, they invaded.

* * *

Once they were in, they had two central missions - to establish a post-Saddam democracy, and to secure access to the oil rights.

These two were firmly opposed - quite a puzzle to put together - because it wasn't in the Iraqi national interest to give oil rights to US and UK companies, and the people of Iraq - where 90% of the economy is in the public sector - knew it.

The allies tackled this by putting in place leaders who had been in exile in the US for over 30 years and were disconnected from the Iraqi people, more aligned with US values and interest. The US provided financial and military support, housed the politicians in army-secured five star hotels and villas while people in Iraq lived without electricity, often water, and sometimes food.

The first thing the US asked the new Iraqi government to do was draft an oil bill allowing foreign companies to buy the rights to Iraqi oil, and pass it through parliament. The bill was drafted in two months and shown the US and UK governments, and western oil companies. Six months later it was shown to the Iraqi parliament. A year later it was shown to the Iraqi people.

Meanwhile the bill was leaked. The minute any Iraqi heard of it, they would start talking about it to their friends, their family, their co-workers, because it was in such opposition to Iraqi values and interests.

The bill became talked about in mosques on fridays, Greg explained. The trade unions held conferences about it, passed out leaflets. Academics joined in. Countless letters were sent to the Iraqi parliament saying, don't sign it, it's bad news. Most of the Iraqi parliament agreed, and didn't sign the bill.

Bush was video conferencing with the Iraqi president almost weekly, Greg says - from interviews with scores of ministers and civil servants. Always asking one question first - when are you going to pass the oil bill?

As time went on the US issued a deadline and threats: if the bill was not passed by September, they would remove financial and military support for the government. In that case, the government would fall.

The deadline passed, the bill was not signed - this was 2007 - it has never been signed. So they just went ahead and sold 20 year contracts to American and British oil companies anyway. Meanwhile they ransacked the offices of the trade unions that were organising the opposition to the bill, destroying computers, destroying furniture, and reinstating Sadam's law that made trade union membership illegal.

Without the bill, those contracts are illegal. Greg outlined a few future scenarios that I won't go into.

The point is, the oil is finite.

At some point we are going to have to figure out how to get to work and get food without using very much of it.

I'm thinking about having children. And I think we're just passing the job onto them. And it's always going to be difficult.

Wednesday, 26 October 2011

I passed the Occupy London protesters at St Pauls on the bus yesterday. On the street was a board reading, 'If not capitalism, then what?'

For me, a central question in post-capitalist thinking is: which models of business ownership are most conducive to social flourishing? I put the question to Simon Zadek when he was a fellow of the Harvard Centre for Business and Government. He replied that it was a "really leading edge question/issue... worthy of a major conference."

My central observation is fairly obvious. PLCs - publicly limited companies, which are owned by shareholders who buy and sell their ownership shares on the stock market, are, to put it simply, bad. Other ways of owning and financing companies are better.

The problem with PLCs
PLCs are a really great mechanism for taking wealth from the many and amassing it with the few.

They receive money from the consumer and time from the employee - the many, the 99% perhaps.

From that income, they maximise surplus (profit) as much as possible.

Then they give that surplus to shareholders - the few. The more shares you have (ie, the richer you are), the more you receive - the richer you get.

It's just fantastic. I really couldn't think of a better way of taking a little bit from everybody, systematically, every day, piling it up, and giving it to wealthier people.

Let's compare, for example, the plc Thames Water with the 'no-shareholder' Welsh Water. In 2007-8 (sorry, did this research a while ago but it's still relevant), Thames' profits of £419 million (overcharging?) were taxed and distributed among shareholders - a mixture of European pension funds and private equity firms in Australia and Canada. (1)

In the same year, Welsh Water's profits of £41 million were taxed, some were re-invested in the company, and the remaining £27 million was sent back to customers who each got a £21 deduction on their next bill.

£21 isn't a lot, but if we were to combine the impacts on wealth distribution of plcs providing water, gas, electricity, housing, insurance, banking, food, clothing, sport, leisure and so on, we would start to see vast, consistent swathes of wealth moving daily from the '99%' to the '1%'. And I haven't even started on banking. Where do you think the interest on your mortgage, if you have one, goes? (3)

To be fair, it's not entirely one way. The authors of The New Capitalists argue that more than 75% of the shares in the UK stock market are held through collective investment vehicles like pension funds. So we are all owners and potential beneficiaries of stock market gains, they say.

The problem is, the more you invest in your pension, the more shares you own, and the greater slice of the pie you usually get back (unless the value falls.) The overall effect remains: the rich get richer and the poor stay poor through our current pension and stock market systems.

Personally, I have a pension with The Co-op bank which is "ethical," which means they invest in pharmaceuticals instead of arms. I set it up when I was 26 because my Dad told me it was time to get one. But I'm not happy about my future security being entirely reliant on a volatile, unjust and unsustainable stock market. I'm thinking about stopping payments and perhaps trying to buy land instead. It feels more... grounded.

Anyway.

What's better than a plc?

Lots of things.

Waitrose, part of the John Lewis partnership, is a great example. It's entirely employee owned. That means you don't get this problematic distribution of wealth effect that plcs create. There's also another important benefit: the localisation of power - ie, employees make the decisions - leads to more ethical company behaviour. Waitrose for example frequently takes a chunk out of profits and does something cool with it, like creating the Leaf scheme that supports farmers in the transition to organic.

The employee-owners have an enduring relationship with the company they own, so they take pride in using its power for good. It's very different when a company is owned by shareholders who have no connection with the company, and will sell shares in an instant if they lose a little value. It puts all the focus on a single bottom line. And we know clearly that single bottom lines don't serve present or future generations. Tomorrow's Company also argues that they don't serve the employees of single bottom line focused companies, who tend to have a bit of a horrible time at work.

Some also argue the plc model is also a nightmare for leaders. It's a nightmare for everyone! Let's leave it behind!

“How can anyone run a business when hedge funds trade big chunks of their equity every day?” asked C4s then Chief Executive Luke Johnson in 2008. “There is another victim of the credit crunch: the publicly traded model of ownership. The near-collapse of many of the large banks in perhaps a dozen countries shows that such corporate structures do not work.” (4)

So. Employee ownership is one great model that, I think, has a place in a post-capitalist economy.

The second is the co-operative model. This is where employees and customers own the company. That's good too for similar reasons.

The third is small businesses. Again, these avoid the wealth distribution problems that big plcs create.
It was, famously, part of Adam Smith's vision of capitalism - a nation of shopkeepers, an abundance of small businesses trading with each other, competition between them keeping prices low and quality high for the customer.

What this means for us
Most people have three obvious roles in relation to plcs.

1) we are customers - eg of Boots, Sainsbury's, HSBC etc (all plcs)

2) we might be employees

3) we are investors, perhaps. Often through pension funds, sometimes more directly.

What we can do as customers
Don't buy things from plcs.

Where's good:

Food
Waitrose, The Co-operative, local shops and markets. I'm not sure about food box schemes. I think Abel and Cole, eg, was recently bought out by a bigger company and I don't know how they're owned. You could enquire if you have a veg box.

Banking
The Co-op, Building Societies like Nationwide and Cheltenham & Gloucester, Credit Unions

Others
I don't really know! Let's find out. I know that about half of British pubs are owned by very big pub companies. I guess it's nice to try to drink at independent pubs. We can find out by asking. I think I'm going to become more vigilant about this.

What we can do as employees
If you work for a plc, quit! If you're looking for a job, don't get a job with a plc!

What we can do as investors and pension holders
Really tough one. Requires some good social innovation I think. My gut feeling is that investing in land is better than investing in the stock market. 70% of Britain is owned by less than 1% of the population. We could probably address that alongside addressing the pension reliance on a stock market that doesn't serve us, if we developed land-based pension schemes. Let's think about that one.

References

(1) Thames Water Utilities Limited, Annual Report and Financial Statements for the year ended 31 March 2008.

(2) Welsh Water gives £27m back to customers. The Guardian, 12th June 2008

(3) A few years ago I considered doing a PhD on sustainable models of business ownership and finance. I spent a few days in the British Library to see if anyone had calculated in any kind of mathematical way the impact of plcs on the distribution of wealth. The closest thing I found was an article identifying the dynamic and describing the insight I was looking for as "a major challenge for future research." Perotti, E and von Thadden, E.L (2006). Corporate Governance and the Distribution of Wealth: A Political Economy Perspective. Journal of Institutional and Theoretical Economics, Vol 162, No.1, p217

(4) Johnson, Luke. Why public ownership is a failed model. The Financial Times, 14th October 2008

Wednesday, 21 September 2011

No-one really knows. That's why the Ecological Land Cooperative is commissioning research to find out, so that campaigners can have crisp, rigorously produced facts to hand when they go for it.

They're crowd fundraising for it and I've just chipped in. You could too! Go on. What else have you done this week to help transform our little island? I haven't done much, this particular week :) You've probably done much more. Chip in nevertheless! As little as £10 would really help I'm told:

It's easy to think about a household or community being self-sufficient in food, and perhaps some aspects of clothing and building - but what about hardware?

is this the answer?

Though I'm not sure we need tractors. I helped out with the annual garlic pull (lots of nice people + 1 field of garlie + 1 day = a barn full of garlic that will supply the farmers market for a year) at CSA farm Earthly Mirth in New York a few weeks ago.

Honestly, this picture doesn't really capture how awe-inspiring Sara and her horses were, and the implications of her use of them.

It was easy to find horse-farming machinery - different things to attach to the horses to do different aspects of farming - because of the significant mormon and amonite farming communities nearby, all of whom use horse-drawn farming techniques, I am told.

Sara had a really beautiful relationship with the horses - she was a kind of a horse whisperer I guess. Which is simply to mean that she found a way to connect with the animals in a way that was not about domination but connection and cooperation.

Christiane Lechneri know what you mean. a friend of mine texted me the other day "hast du es eilig, gehe langsam" - "are you in a hurry, walk slowly" (kind of :)

June 21 at 8:09pm ·

June 21 at 9:35pm ·

Beth TilstonJust watching that on the news. They're going to take everyone with them, aren't they. If they don't collapse, the alternative is to sell all their public services and basically be sucked into a black hole of (even more) debt. Learnt the word peonage the other day, seems appropriate.

June 21 at 10:31pm ·

Paul KingsnorthThis is the north being structurally adjusted, the way the south has been for decades. The people of greece have to pay for decades for the fuck-ups of bankers and for the obsession with the Euro that the EU's leader's have. It's a fantasy coming up against the buffers of reality. They have to default, because their people refuse to become peons. The century is just starting to get interesting!

Paul KingsnorthGood links. I wonder what the possibilities are for a new ruralism? When the banks collapse again this question may become more urgent:

June 22 at 9:50am ·

Beth TilstonIt'll be interesting to find out... My feeling is that we are more fucked than most in this respect given that we're an extremely populous country, we have little left of rural skills and culture, the land is owned by toffs who have had it since Biblical times and it is largely occupied by the people who caused the crisis in the first place (at least it is down here).

June 22 at 8:47pm ·

Paul KingsnorthYes, quite agree - and we also have far less contact with the land than others, given that we were torn from it first. We were the first modern landless nation. Also, I just found out that England has 9% tree cover, while the EU average is 44%! Christ.

June 22 at 10:09pm ·

Ian Lawtonwe're also more fucked than most because what little revolutionary spirit we have has been asleep for longer than everybody else's ... gonna have to learn to farm again very fast i guess - we will have to run to the country when the state finances collapse along with a couple of 'too big to fail' banks ... this is all quite mad isn't it!?

June 22 at 11:27pm ·

I think people will just starve in the cities for a bit as they're starting to now. Or perhaps they'll move out of the big cities to smaller ones where it's cheaper. I don't think people will get 'back to the land' until we see the end of industrial agriculture. Industrial agriculture doesn't need people. I reckon there will be a growth in people working in woodlands before there is in people working in fields. Wood is a fuel, after all. Though if we only have 9% tree cover left - maybe not...

June 22 at 11:49pm ·

I think land prices are the biggest issue actually. I think there would be a flood of back to the landers if it were affordable. the internet has put info about how to work land and grow food at all our fingertips - we're all started from nothing, after all. The demand for allotments would have been unthinkable ten years ago. If the land were not all locked up by landowners and yuppies - which is an issue of population density, history and economics - things would be different. But also, yes, I think the cities may start starving first. Must go and buy that farm ...

June 23 at 9:28am ·

nevertheless i'm hoping we get desperate enough that the landgrabs start. I've always thought that the thirst for allotments is probably driven by a half conscious intuition that we are likely to starve to death in the near future ... landrights are going to become a major issue that's for sure ... i recently bought 'this land is our land' by marion shoard, not read it yet, have you read alastair macintosh's 'soil and soul' beth? ... anyway here's hopin for some Diggers radicalism... ""The power of enclosing land and owning property was brought into the creation by your ancestors by the sword; which first did murder their fellow creatures, men, and after plunder or steal away their land, and left this land successively to you, their children. And therefore, though you did not kill or thieve, yet you hold that cursed thing in your hand by the power of the sword; and so you justify the wicked deeds of your fathers, and that sin of your fathers shall be visited upon the head of you and your children to the third and fourth generation, and longer too, till your bloody and thieving power be rooted out of the land." Gerrard Winstanley

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The Blended Lifestyle

I yearn for a rural lifestyle, getting earth under my fingernails and putting funny-looking delicious veg straight from the earth onto the table. I'd like to get my honey from bee hives rather than squeezy bottles, my milk, yoghurt and cheese from a goat rather than plastic packets that I throw away.

I also love my laptop, my work, my feeling of being plugged into the city.

I am trying to find my way towards a lifestyle that blends self sufficiency with participation in the formal economy. The blog comes with me all the way.